Lakhvi was granted bail on December 18, drawing a furious response from India. Prime Minister Narendra Modi condemned the move.

Pakistan had assured India that it would appeal against Lakhvi's bail in the Supreme Court, but that has yet to happen.

The Islamabad High Court Monday cancelled government orders to keep Lakhvi in prison for another three months under a special provision called the Maintenance of Public Order. “The Islamabad High Court order on Lakhvi calls into question Pakistan's entire approach to terror,” government sources said in New Delhi.

Lakhvi has been in a jail in Rawalpindisince 2009. The court that granted him bail said that it did not have evidence to prove Lakhvi's involvement in the worst-ever terror attack in India, in which 166 people were killed in Mumbai in 2008.

Lakhvi is one of seven people on in-camera trial in Pakistan for the siege of Mumbai, but the trial has produced no results so far. India has repeatedly warned Pakistan that the glacial pace of the trial is unacceptable and undermines Pakistan's stated position on checking terrorism.

India said that its investigators have submitted voice samples and other evidence that reveal Lakhvi talking on satellite phones to the 10 terrorists who sailed into Mumbai and attacked its most famous landmarks.